Fort Hills Energy Limited Partnership Releases Updated Cost Information for the Fort Hills Project
CALGARY, ALBERTA--(Marketwire - Sept. 17, 2008) - The Fort Hills Energy Limited Partnership said today that the preliminary results from the Front-End Engineering and Design (FEED) work suggest that estimated costs for its Fort Hills Project (Project) have risen considerably. The Project, as currently conceived, consists of an integrated oil sands mine and bitumen extraction plant 90 kilometres north of Fort McMurray, Alberta and an upgrader in Sturgeon County northeast of Edmonton, Alberta.
The Fort Hills Partners remain fully committed to the Project and are assessing these preliminary estimates and a range of options to reduce or defer capital costs.
While both the preliminary cost data and the Project scope are still under review, initial indications suggest that the estimated capital costs for the Project, as currently conceived, have increased in the range of 50% from those announced when the Partners approved the Design Basis Memorandum for the Project in June 2007.
The major increases are costs associated with construction materials, labour, project management and engineering.
The Fort Hills Partners are discussing options for development of the Project, including the phasing of various aspects of the Project. Selected options are expected to be reflected in the final FEED outcome. Once FEED work is complete, Fort Hills will develop a definitive cost estimate, which will be the basis for the final investment decision planned by the Fort Hills Partners for the fourth quarter of 2008.
Proceeding with the Fort Hills Project is also subject to certain regulatory approvals being received. Fort Hills is working with the regulators and various stakeholders to obtain the necessary approvals.
Fort Hills Energy L.P. consists of Petro-Canada with a 60% working interest, UTS Energy Corporation with a 20% working interest and Teck Cominco Limited with a 20% working interest, with Petro-Canada Oil Sands Inc., a wholly owned subsidiary of Petro-Canada, as the contract operator for the project.
Petro-Canada is one of Canada's largest oil and gas companies, operating in both the upstream and downstream sectors of the industry in Canada and internationally. Its common shares trade on the Toronto Stock Exchange (TSX) under the symbol PCA and on the New York Stock Exchange (NYSE) under the symbol PCZ.
UTS Energy Corporation is focused on growing and developing oil sands assets. The company was instrumental in re-establishing the Fort Hills Oil Sands Project and is the principal founder of the Fort Hills Energy Partnership. Based in Calgary, Alberta, the company's common shares are traded on the TSX under the symbol UTS.
Teck Cominco Limited is a diversified mining company, headquartered in Vancouver, Canada. Its shares are listed on the TSX under the symbols TCK.A and TCK.B and on the NYSE under the symbol TCK. The company is a world leader in the production of zinc and metallurgical coal and is also a significant producer of copper, gold, indium and other specialty metals. Further information can be found at www.teckcominco.com.
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This release contains forward-looking information. You can usually identify this information by such words as "plan," "anticipate," "forecast," "believe," "target," "intend," "expect," "estimate," "budget" or other similar wording suggesting future outcomes or statements about an outlook. Below are examples of references to forward-looking information:
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Such forward-looking information is subject to known and unknown risks and uncertainties. Other factors may cause actual results, levels of activity and achievements to differ materially from those expressed or implied by such information. Such factors include, but are not limited to:
- industry capacity
- the effects of weather and climate conditions
- imprecise reserves estimates of recoverable quantities of oil from resource plays, and other sources not currently classified as reserves
- the results of exploration and development drilling, and related activities
- the ability of suppliers to meet commitments
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- expected rates of return
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Many of these and other similar factors are beyond the control of Petro-Canada, Teck and UTS. Petro-Canada, Teck and UTS discuss these factors and other risks in greater detail in their respective annual information forms and other filings with the Canadian provincial securities commissions and the United States Securities and Exchange Commission.
We caution readers that this list of important factors affecting forward-looking information is not exhaustive. Furthermore, the forward-looking information in this release is made as of the date of this release and, except as required by applicable laws, Petro-Canada, Teck and UTS do not intend to update it publicly or revise it. This cautionary statement expressly qualifies the forward-looking information in this release.
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